Sorry, what has happened?Last year, US president Barack Obama asked the Environmental Protection Agency (EPA) to come up with a plan to cut carbon dioxide emissions from existing power plants. The agency has just presented that plan. It says that by 2030, emissions from power plants that are in operation today will have to be cut to 30 per cent below 2005 levels.

Oh, so it's just power plant emissions. How significant is that?Pretty significant. They account for 40 per cent of US emissions.

I thought there wasn't any hope that the US would ever regulate emissions?Passing new laws on climate change has been… difficult. In the current political climate, a law that sets an overall cap on US emissions, as exists in Europe, would never pass. There's simply too much opposition from the Republicans.

However, there has always been a back door, and that is the Clean Air Act. It makes the EPA legally responsible for regulating pollutants like mercury and CFCs. Obama has always said that he would use this if he couldn't pass a new climate bill.

Using legislation like that sounds a bit like political trickery.If it is, it's trickery approved by the highest court in the land.

Back in 2007, 12 states sued the EPA in a court case known as Massachusetts vs EPA. The states claimed that CO2 is harmful to human health, and because the Clean Air Act requires the EPA to regulate all pollutants that "may reasonably be anticipated to endanger public health or welfare", the EPA was obliged to regulate CO2. The case went to the Supreme Court, and the states won. Today's announcement is just the long-awaited result of that lawsuit.

So, power plants will need to spend money on cleaning up their pollution?Yes.

How are they going to do that?It is up to state governments. Today's proposal leaves it up to them to decide how they want to tackle the problem.

Most experts agree that the most cost-effective approach is to first increase energy efficiency – so, more efficient light bulbs and appliances. The US is not known for being economical with its energy usage. Other measures could include boosting renewables or, for coal-fired power stations that produce a lot of CO2, introducing carbon capture and storage.

Won't that just make electricity bills go up?You might think so, but several analyses say otherwise. For instance, the US Natural Resources Defense Council published a report on Friday modelling the consequences of a similar target. They looked at a 36 per cent cut, and found that household electricity bills should come down by $37.4 billion a year by 2020 – saving an average of $109 per household across the US. A lot of that is down to improved energy efficiency: with help from their state, people will use less energy to heat and light their homes, which means fewer emissions from the power stations.

What about jobs? And won't a bunch of power stations have to shut down?Yes, that's possible, and the coal lobby has been the main opponent to climate change legislation. On the other hand, reports suggest that there are already more people employed in the renewable energy field than in the coal industry, and boosting wind and solar will create more jobs. In his weekly video address on Saturday, Obama said: "Every 4 minutes, another American home or business goes solar – and every panel is pounded into place by a worker whose job cannot be shipped overseas." The NRDC's analysis of a 36 per cent emissions cut suggests it could create over 270,000 new jobs.

I don't live in the US. Why should I care about this?Because it should help the global effort to avoid dangerous climate change. Don't underestimate what a strong US stance on cutting emissions can achieve.

International talks on climate change have been in deadlock for about a decade. That's largely because of conflict between rich nations – which historically emitted the most – and poor ones, which suffer the most because they can't protect themselves from things like heatwaves and rising seas.

Some poor nations are now emitting lots of greenhouse gases, and China is now the world's biggest emitter. Without a significant commitment from the US, China and these other countries won't commit to cutting their own emissions.

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Existing coal-fired power plants will have to cut their emissions (Image: Paul Souders/WorldFoto/Corbis)